The total market capitalization of all digital currencies has surpassed $500 billion dollars for the first time.

As both Ethereum and Litecoin soared to new record highs Tuesday, the combined market value of cryptocurrencies hit an all-time high of $506 billion at about 7:40 a.m. ET Wednesday, according to Coinmarketcap data.

That figure is worked out by multiplying the prices of cryptocurrencies by the total volume of those digital tokens in circulation.

The market has seen unprecedented interest from investors as of late, and is now worth more than the market cap of billionaire Warren Buffett's company Berkshire Hathaway, which is currently valued at around $491 billion. The figure is also higher than the combined value of U.S. banks Citigroup and Wells Fargo, which are currently worth $201 billion and $297 billion respectively.

Adam Jeffery | CNBC

Warren Buffett, Chairman and CEO of Berkshire Hathaway.

Crypto market 'entering unchartered territory'

Charles Hayter, chief executive of digital asset comparison site Crypto Compare, said his service was "straining at the seams" trying to cope with increased demand.

"We are entering unchartered territory with huge risks, regulatory and technologically," Hayter said in an email to CNBC.

"There are clear comparisons to the internet bubble. We are straining at the seams spinning up servers to cope with traffic at over 1 million users per day. There is a lot of fear and greed, but that aside there is a redefining the concept of value in the virtual world with new mechanisms for value exchange."